S&P Futures 500
Note: All percentages shown above are referenced to the previous business work day's 09:00 (GMT+8)
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Our Daily View
What We Are Covering Today
- Dollar hits 11-week high; China intensifies market intervention (More in Macro & TradFi)
- S. Korea regulator to discuss spot Bitcoin ETF with SEC chief; Multicoin capital negotiating sale of approximately $100M worth of FTX claim (More in DeFi & CeFi)
- BTC’s MVRV at 2-year high; $LINK accumulation right before price rise (More in On-Chain)
- BTC market shows contango stability; 25-delta skews reveal mixed short and medium-term sentiment (More in Crypto Derivatives)
- BTC faces bearish signals at $42K; ETH continues to show consolidation within an ascending wedge (More in Crypto Technical Analysis)
Macro & TradFi
The U.S. dollar reached an 11-week high against a basket of currencies, with the Dollar Index hitting 104.60, following recent economic reports that suggest a stronger U.S. economy and reduced likelihood of immediate Federal Reserve rate cuts. The increase was influenced by January's robust ISM services sector data, which showed growth and a strong jobs report, leading to a reassessment of the Fed's rate trajectory. Treasury yields, particularly the two-year yield, saw a notable increase, supporting the dollar's surge. Federal Reserve Chair Jerome Powell indicated on CBS's "60 Minutes" that the central bank could afford to wait before reducing interest rates, looking for sustained inflation movement towards their 2% target. This data and Powell's comments have led to a decrease in the market's expectation for rate cuts, with futures now pricing in significantly less, easing for the year compared to previous estimates. The euro and yen both weakened against the dollar, with the euro affected by data showing a dip in German exports, indicating weak global demand and economic stagnation in Germany. Sterling also fell to its lowest since December, as the dollar's strength overshadowed UK unemployment data, which was lower than expected at the year's end.
China is increasing its trading restrictions for certain domestic and offshore investors to stabilize its stock market amidst a significant downturn. The authorities have implemented limits on cross-border total return swaps, which have been used by mainland investors to short Hong Kong stocks. Additionally, some quantitative hedge funds have been restricted from selling stocks, specifically those engaged in leveraged market-neutral funds, due to concerns over exacerbating the sell-off in small-cap stocks. These measures are part of broader efforts by China to halt a stock rout that has erased considerable market value and shaken investor confidence. The China Securities Regulatory Commission has warned against market manipulation and "malicious short selling," pledging swift action against such activities. Despite these moves and the promise of further measures to support the market, investor sentiment remains cautious. The recent downturn has been driven by various factors, including weak economic data, geopolitical tensions, and a crisis in the property sector.
On Monday’s close, US stock indexes retreated from recent highs, with the Dow Jones Industrial Average falling 0.71% to $38,380.12, the S&P 500 dropping 0.32% to $4,942.81, and the Nasdaq Composite down 0.20% to $15,597.68. The pullback ensued after remarks from Federal Reserve Chair Jerome Powell and Minneapolis Fed President Neel Kashkari suggested that rate cuts might not be as imminent as anticipated. This sentiment was reinforced by the day's rise in Treasury yields and ISM service sector data indicating economic resilience. The S&P 500's materials sector saw a significant decline, largely influenced by Air Products' 15.6% tumble after an underwhelming profit forecast. Investors should look out for the release of China’s CPI data on Thursday, 8 February at 09:30 SGT.
CeFi & DeFi
- S. Korea regulator to discuss spot Bitcoin ETF with SEC chief
- Multicoin Capital negotiates the sale of approximately $100M worth of FTX claim
- FTX Seeks to Sell 8% Stake in Anthropic for the sake of 'Shareholders'
- Web Registry GoDaddy, Ethereum Name Service Connect Domain Names With Crypto Wallets
- Hashnote's U.S. Treasuries Token Now Available Through Crypto Custodian Copper
South Korea's top financial regulator is planning to reach out to the U.S. Securities and Exchange Commission (SEC) to gain insights on spot Bitcoin exchange-traded funds (ETFs). Chief Financial Regulator Lee Bok-Hyun unveiled a business plan for 2024 at the Financial Supervisory Service in Seoul on February 5. The plan encompasses trips to leading advanced financial markets, including New York, in the second quarter of the year to discuss various facets of South Korean financial markets. Lee Bok-Hyyun revealed that he plans to meet SEC Chair Gary Gensler later in 2024 to discuss digital assets and spot Bitcoin ETFs, among other issues. He added that the SEC’s recent approval of spot Bitcoin ETFs had a major impact on the world’s financial policies.
According to someone with knowledge of the matter, cryptocurrency investment company, Multicoin Capital, is reportedly negotiating the sale of its FTX bankruptcy claim, valued at approximately $100 million. Recently, favorable developments related to the FTX bankruptcy have led to claims being traded at more than 70 cents on the dollar, with values moving toward the 80 cents range. Companies like Multicoin, which found themselves entangled in the FTX downfall, have been targeted by buyers of claims for over a year. As potential offers increase, these companies are considering the opportunity cost of capital and are choosing to sell their claims sooner rather than later.
CryptoQuant's analysis indicates that Bitcoin's Market Value to Realized Value (MVRV) ratio has reached a two-year peak, a level that has previously coincided with Bitcoin's price exceeding $50,000 in December 2021. An ascending MVRV MA30d ratio implies that market capitalization is surpassing realized capitalization, which can lead to augmented selling pressure. Historically, such elevations in the MVRV ratio have signaled a local price zenith before the onset of vigorous bull markets that catapult Bitcoin to unprecedented highs. Following a recent high of $49K, the price underwent a correction of approximately 20%. With the Bitcoin Halving event expected in less than three months — a traditionally bullish market driver — will the current selling pressure push the MVRV back into the Accumulation range seen in 2019-2020, or could the Halving event bolster bullish sentiment?
The on-chain activity for $LINK suggests that there may be a strategic accumulation occurring, as eight new wallets have moved a significant volume of $LINK out of CEXs, as analyzed by Spotonchain. The withdrawal of 227,350 $LINK, valued at approximately $4.12 million, at an estimated price of $18.1 each, and the subsequent price increase of roughly 4.1%. These transactions took place just before a price increase, which could suggest that the entity involved has expectations of further positive price action or was privy to information that prompted a timely accumulation.
- Funding rates remained positive for BTC and ETH.
- Deribit Implied Volatility Index (DVOL) for BTC and ETH remained relatively unchanged at 42.00% and 41.91%, respectively.
- The 30-day 25-delta skew (C-P) for BTC and ETH returned positive, rising to 0.19% and 0.08% respectively.
- The futures market witnessed $77.01M liquidations, with longs representing 55.8%.
Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities
Net Annualized APR
Perp (USDT pair)
Source: @CexyArbBot Telegram Bot
1) Pairs observed include BTC, ETH, SOL, BNB, XRP, LTC, and DOGE vs. USDT perps.
2) CEXs observed include Binance, Bybit, OKX & dYdX.
3) Lookback period is 24 hours.
The At-the-Money Implied Volatility (IV) of BTC exhibits a declining trend, stabilizing around the 40% mark, potentially attributed to an absence of significant catalysts for BTC in the foreseeable future. This stabilization suggests a market consensus on price expectations, indicating a period of relative calm and predictability in BTC's price movements.
The term structure of the BTC market has not experienced any changes in the past day, continuing to exhibit a contango pattern.
The BTC’s 25-delta call-put skews have shifted, with the 30-day skews turning positive at 0.19%, while the 7-day skew remains negative at -0.29%. This divergence indicates a short-term bearish sentiment contrasted by a more bullish outlook over a 30-day horizon. Specifically, the positive skew for the 30-day options suggests that investors are willing to pay more for call options, anticipating an increase in BTC's price in the medium term. Conversely, the negative skew for the 7-day options reflects a preference for put options, suggesting expectations of a short-term decrease in BTC's price.
Lastly, during @Paradigm’s Asia / Europe Session Hours, highlighted option flows this week emphasized downside coverage with strategic structured positions. Key BTC trades included the purchase of 150x 23-Feb-24 40k Puts and a complex transaction consisting of 150x 16-Feb-24 37/38/39k Custom Puts. On the ETH front, significant activities were observed in the acquisition of 1500x 29-Mar-24 2700 Calls and the selling of 1250x 16-Feb-24 2250/2100 Put Spreads.
Crypto Technical Analysis
Moving on to BTC technical analysis, on the 4-hour chart, BTC is testing the critical support level at $42K after recently breaching both the 50 and 200 SMAs, indicative of bearish sentiment gaining strength. The price's sustained position below these key moving averages typically suggests a shift in momentum to the downside. Should the $42K support level fail to hold, the next notable support is located at $41K, which would mark a 2.4% decrease from the current price. Conversely, resistance is now likely to form near the previously breached 50 and 200 SMAs, potentially aligning with the $43K price zone. The RSI, currently at the midpoint, reflects indecision in the market. However, this neutrality could quickly tilt toward bearishness if the support level at $42K does not provide a strong enough floor for the price to rebound.
On the other hand, ETH has sustained its position within the ascending wedge pattern, demonstrating a contained upward trend within converging trendlines. The price is currently trading near $2.27K, pressing against the lower boundary of the wedge. The persistence within this formation suggests a consolidation phase, with the price oscillating between narrowing price points. The immediate support for ETH lies at $2.24K, presenting a downside of 3.52%. On the flip side, resistance can be anticipated at around $2.4K. The RSI is at 52, slightly above the midpoint, indicating a marginal lean toward bullish momentum; however, it still largely suggests a neutral market dynamic. If the support at the SMAs fails to hold, ETH may retreat to test the lower bounds of the wedge pattern. Conversely, an upward breakout from the wedge could encounter resistance near the $2.4K level, potentially establishing a new range for price exploration.
Access institutional-grade commentary on TradFi × Crypto markets
By Treehouse Research
Treehouse Research 🌳